How do I create an ad hoc charge or credit in Zuora?

Adjust Existing Invoices

In order to create an ad hoc charge or a credit for an existing invoice, you would create an invoice adjustment (IA) or invoice item adjustment (IIA).

Positive Invoice:

• In order to create an ad hoc negative charge, such as a customer service credit, you can create an IA or IIA to make the invoice less positive. In the API, this adjustment type is a credit.
• In order to create an ad hoc positive charge, such as a late fee, you can create an IA or IIA to make the invoice more positive. In the API, this adjustment type is a charge.

Negative Invoice:

• In order to create an ad hoc negative charge, you can create an IA or IIA to make the invoice more negative.  In the API, this adjustment type is a credit. 
• In order to create an ad hoc positive charge, you can create an IA or IIA to make the invoice less negative. In the API, this adjustment type is a charge.

Note that the ability to make a negative invoice more negative or a positive invoice more positive is an advanced invoice adjustment feature that is available via API only.  This feature is not available for Z-Suite or QuickBooks integrations.  If you would like to use this feature, please contact Zuora Global Support to provision this feature for your tenant.

Amend Future Invoices

In order to create an ad hoc charge or credit for a future invoice you would create an amendment.  An amendment allows you to associate the charge to the subscription for better reporting and an amendment has a complete audit trail, which is very helpful in the event your customer care teams need to refer back for more information on the charge or the credit.

You can create an ad hoc charge or credit that is one-time or recurring and is positive or negative.  As a best practice, you can create a product for the customer service credit, late fee, or any other typical ad hoc charge.

• To create an ad hoc negative charge (credit), such as a customer care credit: create an amendment to Add Product, then select the previously created product for the customer service credit and enter a negative amount.  This will create the ad hoc credit and it will appear on a future invoice.
• To create an ad hoc positive charge (charge), such as a late fee: create an amendment to Add Product, then select the previously created product for the late fee and enter a positive amount.  This will create the ad hoc charge and it will appear on a future invoice.
• If you want to generate a separate ad hoc invoice for the credit or charge immediately versus including it on the invoice in the next invoice period, use a one time charge and execute a bill run after creating the amendment.

Important Considerations

There are different implications if you issue a charge or credit to an existing invoice versus a future one:

• If you issue a credit against an existing invoice via an IA or IIA, the credit will reduce the accounts receivable, which will impact your cash forecasts.
• If you issue a charge against an existing invoice via an IA or IIA, it increases the invoice balance but does not increase the total contract value (TCV) of the subscription.
• If you issue a credit using an amendment that is applied to a future invoice, you may generate a negative invoice if the other charges on the invoice do not exceed the amount of the credit.
• If you issue a charge using an amendment that is applied to a future invoice, you may generate this charge as a separate ad hoc invoice or an invoice that is generated as part of your normal process.

When issuing a charge, it is important to consider the customer expectations and the implications to the payment processing:

• Generally, B2C customers expect credits and charges to impact the next invoice. When an ad hoc invoice or invoice adjustment is generated and a payment applied, it may create confusion and even prompt a call into your customer care teams or even their credit card company to dispute the charge.
• On the other hand, B2B customers are often more comfortable receiving a separate invoice for an ad hoc charge.  For instance, a late fee that is added to an existing invoice, it often will create a challenge for your customer's accounts payable system.